We've come along way from paper billboards. New LCD outdoor displays are providing amazing growth for two companies, APN Outdoor Group Ltd (ASX: APO) and oOh!Media Ltd (ASX: OML). As the chart below illustrates, APN has grown by a mind-blowing 104.9% over the past 12 months, while oOh!Media has risen 89.2%.
Digitisation has translated into significant revenue streams for the two outdoor advertising companies, which revealed solid rises in full-year profits yesterday.
In their first results as listed companies, both comfortably beat the forecasts outlined in prospectuses ahead of their 2014 stock market listings.
The earnings growth was driven by the uptake of digital advertising platforms on top of traditional posters and billboards.
The digital adverts range from small screens in office lobbies and cafes to interactive wall displays on train platforms which flash everything from video announcements to news and weather updates.
Advertisers are attracted to the opportunities presented by electronic screens, which can broadcast material in a timely fashion and in high quality.
"Digital's added another string to our bow, it's added another capability to engage an audience and to have advertisers look at different creative ways they can use the medium," oOh!media chief executive Brendon Cook said.
oOh!Media saw digital sales grow to make up a third of its revenue, while APN Outdoor also saw digital expand to almost a quarter of its total.
By 2019, oOh!Media is expecting digital to make up half of its revenue.
It added more than 9,000 new digital retail screens and 17 digital roadside panels last year, while APN put in 18 large-format digital screens, and plans to put in 20 more this year.
Both companies are accelerating their digital roll-out, with plans to convert more static billboards and posters.
They're also forecasting double-digit revenue growth in 2016.
Outdoor advertising is the second-highest growing market in the advertising space, behind online digital, but in front of television, radio and newspapers.
This 'changing of the guard" in advertising, is also reflected in the share price of traditional advertisers like Ten Network Holdings Limited (ASX: TEN), Nine Entertainment Co. Holdings Limited (ASX: NEC), Seven West Media Limited (ASX: SWM) and Fairfax Media Limited (ASX: FXJ), all down 50%, 24%, 33%, and 15% respectively over the past 12 months.
